THE top American
professional of an international Holocaust
restitution commission was investigated
for allegedly misappropriating commission
funds for personal use before resigning
last summer, according to sources and an
internal document written by the
commission's chairman.

Neal
Sher, former chief of staff in the
Washington office of the International
Commission on Holocaust Era Insurance
Claims, was investigated by the commission
after admitting "unauthorized
reimbursements of his ICHEIC travel
expenses," the internal commission
document states. The document was written
by the chairman of the Holocaust
commission, former secretary of state
Lawrence Eagleburger.

Following the investigation, which was
subjected to a "review" by a former FBI
chief, Judge William Webster, Sher
resigned in June and paid "full and
immediate restitution," the document
states. A source with direct knowledge of
the situation, as well as other sources
close to the commission, verified the
existence and content of the document.

Although these allegations were made,
the Forward has not established
that they are true.

Sher is widely
admired for his groundbreaking work
as the federal government's chief Nazi
hunter during 11 years as director of the
Office of Special Investigations of the
U.S. Department of Justice. During that
time he oversaw the denaturalization and
deportation of dozens of onetime Nazi war
criminals. He also led the investigation
into the Nazi past of Austrian president
Kurt Waldheim and was credited for
Waldheim's placement on the watch list of
persons ineligible to enter the United
States. After leaving the OSI in 1994 he
became the executive director of the
American Israel Public Affairs Committee,
a post he held for two years.

But Sher's tenure as head of
the Holocaust insurance commission was
stormy almost from the outset. Under
his watch, the commission was subjected
to criticism from Holocaust survivors
and members of Congress for allegedly
exorbitant administrative expenses,
including spending for travel,
according to press reports at the time.
The controversy was reported in the
Forward as well as the Baltimore
Sun and the Los Angeles
Times.

The commission document describing
Sher's alleged "unauthorized
reimbursements" is addressed to
Pennsylvania insurance commissioner
Diane Koken, who chairs the
commission's five-member finance
committee. The document is dated June 25,
2002, five days after the commission
officially announced Sher's
resignation.

Sher first admitted his actions to
Eagleburger, who regarded them as
"probable improprieties" and placed Sher
on "administrative leave" pending an
investigation, the document states.
Eagleburger then asked the commission's
legal counsel, Tom Howard, to
conduct a "fact-finding investigation" and
enlisted Webster to review the case,
according to the document.

Sources close to the commission told
the Forward that Sher had been
alleged to have carried out a
misappropriation by improperly claiming
reimbursement for his air travel.

The Baltimore Sun, in an article
on the commission's administrative costs
published on July 7, 2002, reported on
Sher's air travel expenses. The newspaper
claimed that commission financial records
showed that in 1999 Sher spent $136,563 in
travel expenses, mostly for travel to
Europe. "Sher's first-class or
business-class airfare to Rome, Berlin and
other cities often totaled $5,000 or more
per trip," the article stated.

The insurance commission was formed in
1998 by survivor organizations, state
insurance commissioners, representatives
of Jewish groups and the Israeli
government and European insurance
companies including Germany's Allianz,
France's Axa, Italy's Generali and
Switzerland's Winterthur and Zurich.
Funded by the companies, the commission
seeks to resolve and pay claims by
survivors and heirs of Nazi victims who
contend companies refused to pay their
families' life insurance policies.

One member of the insurance commission,
Roman Kent, a Holocaust survivor
and treasurer of the Conference on Jewish
Material Claims Against Germany, told the
Forward that he had no prior
knowledge of the existence or content of
the internal commission document. Upon
hearing about the document Kent said, "if
full restitution was made and [Neal
Sher] resigned, I think that should be
the end of the story."

An Israeli representative on the
commission, Bobby Brown, told the
Forward that he too had no prior
knowledge of the letter's existence or
content. He added: "If what the Forward
says is accurate about this matter, it
appears that all sides took this incident
with a great deal of seriousness, and the
public's interest was protected and the
matter seems to have been handled
properly."

"I know that in the past [Neal
Sher's] work on behalf of tracking
down Nazis, expelling them from the United
States was heroic," Brown said. "His work
on Waldheim was really an incredible piece
of investigation and for that he will be
remembered. As far as any improprieties
that he's accused of, I have no
information of this."

Sher did not return phone calls seeking
comment. Several other commission members
contacted by the Forward declined
to comment for the record.

The
commission had come under fire from some
members of Congress and Holocaust survivor
advocates for spending excessively while
delivering little compensation. As of July
2002, operating expenses totaled $40
million, while only $18 million in
payments had been offered to claimants,
according to commission
officials.

Christopher
Hitchens on
Eagleburger:
"Eagleburger is paid $300,000 a year to
chair a commission that arbitrates
unpaid insurance claims, brought by
people often no better than bounty
hunters, on the lives of the dead of
the Nazi era. "